XRG enters Venezuela through major Loran gas deal

XRG has entered Venezuela’s energy sector after securing an interest in the offshore Loran gas licence, extending Abu Dhabi National Oil Company’s international investment arm deeper into Latin America’s natural gas and liquefied natural gas market.
The Abu Dhabi-based company will participate alongside BP and UCC Oil and Gas Holding in the second phase of Loran, a large offshore gas resource within Venezuela’s Plataforma Deltana area. BP will operate the project, while the three partners are set to hold equal working interests, subject to the required regulatory approvals. The licence gives the consortium rights to develop more than 4 trillion cubic feet of gas.

Loran as a whole is estimated to contain about 7.3 trillion cubic feet of gas. Its geological structure extends across the maritime boundary into Trinidad and Tobago, where the same reservoir is known as Manatee. The combined Loran-Manatee accumulation contains about 10 trillion cubic feet of recoverable gas, making it one of the most significant undeveloped gas resources in the southern Caribbean.

XRG’s participation marks a significant step in its strategy of building an international gas and LNG platform spanning production, processing and export markets. The company has been expanding beyond the UAE through investments intended to secure exposure to long-life natural gas assets and LNG infrastructure, with Latin America emerging as an increasingly important part of that portfolio.

The Loran Phase 2 award follows a memorandum of understanding signed in April covering cooperation on exploration and development opportunities in Plataforma Deltana. Venezuela subsequently awarded Shell rights covering the first phase of Loran in June. The first and second phases are expected to advance in parallel, potentially accelerating development of a resource that remained largely undeveloped for more than two decades.

Development of Loran is closely tied to Trinidad and Tobago’s established gas-processing and LNG infrastructure. Shell is already developing Manatee, the Trinidad and Tobago portion of the reservoir, after taking a final investment decision in 2024. Production is scheduled to begin in 2027, with peak output expected at about 604 million standard cubic feet per day, equivalent to roughly 104,000 barrels of oil equivalent daily.

Manatee gas will move through a planned 110-kilometre pipeline to the Shell-operated Beachfield processing facility before supplying Atlantic LNG and the domestic market. That infrastructure provides a potential commercial pathway for Venezuelan offshore resources at a time when Trinidad and Tobago is seeking additional gas supplies to improve utilisation of its LNG and petrochemical plants.

The two countries originally agreed to jointly develop the cross-border Loran-Manatee reservoir. A unitisation agreement signed in 2010 was terminated in 2019, allowing Venezuela and Trinidad and Tobago to develop their respective portions independently. The arrangement removed one of the principal institutional obstacles that had complicated development of the discovery, which dates back to 1983.

BP’s entry strengthens the international participation in Venezuela’s offshore gas sector. The company has also signed a memorandum of understanding to assess exploration opportunities at the Carupano East block in the Mariscal Sucre offshore area, broadening the scope of its discussions with Caracas beyond Loran.

For XRG, Venezuela adds another resource position to a portfolio that has expanded rapidly since the company was established as Adnoc’s international investment vehicle. Its assets have grown beyond $150 billion, including exposure to LNG, chemicals and listed energy businesses, while the company is pursuing a long-term ambition to become one of the world’s largest natural gas players.

The Loran investment also places XRG alongside some of the largest international energy companies pursuing new projects in Venezuela as the country seeks foreign capital, technology and offshore development expertise. Years of limited investment left substantial oil and gas resources undeveloped despite Venezuela possessing one of the world’s largest hydrocarbon endowments.

Project economics will depend heavily on development costs, infrastructure arrangements, fiscal terms and the ability to connect Venezuelan production efficiently with regional processing and LNG capacity. The proximity of Loran to Manatee and Trinidad and Tobago’s existing export infrastructure gives the project a potential advantage over greenfield LNG developments requiring entirely new liquefaction facilities.